The Renters’ Rights Bill 2024 – Changing Rules for Residential Landlords and Tenants

Whilst the bill itself has been submitted in October 2024, we anticipate that it is likely to be granted within 2025. With a short transitional period, there will be a single employment date introduced in or around 2026.

Whether you are currently a landlord or tenant under an assured shorthold tenancy, or are planning to enter into a new tenancy in the coming months, it is important to be aware of the key changes.

Key Changes Under the Renters’ Rights Bill

    a. New Regulatory Obligations for Landlords

Landlords must register with a new private rented sector database and will be subject to oversight by a statutory landlord ombudsman. They must also comply with decent homes standards, including the timely resolution of hazards such as mould or dampness at the Property.

While reputable landlords are unlikely to encounter significant compliance issues, there will be increased administrative and regulatory burdens, with possible enforcement action for non-compliance.

    b. Conversion to Periodic Tenancies

All assured shorthold tenancies, including those already in effect, will convert to open-ended periodic tenancies, and any fixed-term clauses within tenancy agreements will cease to be enforceable.

Tenants will be permitted to terminate their tenancy at any time by giving a minimum of two months’ notice to the landlord. While this enhances flexibility and autonomy for tenants, it diminishes certainty for landlords, who will no longer be assured of a fixed rental term.

    c. Abolition of ‘No-Fault’ Section 21 Evictions

The Bill will abolish Section 21 of the Housing Act 1988, removing a landlord’s ability to regain possession of a property without proving grounds for eviction. Instead, landlords must rely solely on the statutory grounds for possession under Section 8, which may be mandatory or discretionary, and generally require court involvement.

    d. Updated Grounds for Possession

There is a change in the mandatory grounds for possession, including:

• Landlords may serve four months’ notice if they intend to sell or personally occupy the property, but only after the first year of tenancy.
• A tenant with at least three months’ arrears at the date of notice and hearing may be evicted on four weeks’ notice.
• Criminal Conviction: Landlords may initiate immediate possession proceedings if the tenant has been convicted of serious anti-social behaviour.

There has also been a change in the discretionary grounds, including:

• If there is suitable housing is available, a tenant may be given two months’ notice;
• Where a tenant consistently pays rent late, four weeks’ notice may be given.
• Two weeks’ notice may be served for other tenancy breaches, such as damage or deterioration of the property.

    e. Rent Review Restrictions

Any existing rent review clauses in tenancy agreements will become void, and landlords will only be permitted to raise rent once annually, using a modified Section 13 notice procedure that allows tenants to challenge increases before the First-tier Tribunal (FTT).

    f. Limits on Advance Rent and Payment Frequency

Landlords will be prohibited from requiring tenants to pay more than one month’s rent in advance, and rent payments must be collected on a monthly basis. This is likely to disrupt arrangements with international tenants or students who prefer to pay quarterly or annually.

Considerations for Landlords

In anticipation of these reforms, landlords are advised to take the following steps:

1. Review existing tenancies to identify undesirable tenancies;
2. Consider the timing of serving Section 21 notices;
3. Budget for compliance with new registration and housing standards;
4. Update internal policies to align with the upcoming regime and mitigate the risks of regulatory scrutiny or tenant challenges.

Final Thoughts

The Renters’ Rights Bill 2024 marks a cataclysmic shift in residential tenancy law, aimed at increasing tenant security but significantly curtailing landlords’ contractual flexibility. Considering the above, it is imperative that landlords act now to review and adjust their letting practices before the Bill becomes statute.

If you require tailored advice on your current tenancy arrangements or wish to discuss strategic options prior to implementation, please contact the Sterling Law team with your request.

Submit your enquiry